, recalled that he served on a bipartisan blue-ribbon panel commissioned by McGreevey that recommended a 14.5-cent increase in the gas tax. McGreevey, politically weakened by looming ethics scandals, backed off and killed it.
Treasurer Andrew Sidamon-Eristoff confirmed at Schaer’s Assembly Budget Committee hearing that he would have to begin working on a plan to renew TTF this summer, rather than the following year, because the administration borrowed so heavily in its first four years that it would not have enough debt capacity left over to pay for transportation projects in the 2016 fiscal year that starts July 1, 2015. The treasurer refused to respond to questions about transportation-funding options after the hearing, and administration officials have failed to respond to emailed questions on the subject.
Transportation Commissioner Jim Simpson will undoubtedly face questions on both the TTF renewal and on prospective Port Authority reforms when he testifies before Schaer’s committee Monday afternoon.
Not since the bankruptcies of the Penn Central, Jersey Central, and Erie Lackawanna commuter railroads and the defeat of three successive bond issues led to the creation of New Jersey Transit in 1979 has New Jersey faced such a crisis simultaneously in transportation funding, planning, and infrastructure needs. And the report issued yesterday by New Jersey Policy Perspective recognized the magnitude of the challenge.
Asserting that New Jersey needs a state-of-the-art transportation infrastructure in order to remain economically competitive, the Trenton-based public policy institute urged that the state increase funding for TTF from $1.6 billion a year to $2 billion a year -- a figure that would come closer to meeting the massive transportation infrastructure needs identified by, a bipartisan group of former high-ranking state officials convened by the Council of New Jersey Grantmakers.
“It’s no surprise that funding for the Transportation Trust Fund has stagnated, since New Jersey’s leaders have been unwilling to raise additional money to support this important investment,” said David Rousseau, the former state treasurer under Democratic Gov. Jon Corzine, who serves as NJPP’s budget analyst and coauthored the report with MacInnes, a former Democratic state senator who serves as NJPP’s president.
“Policymakers haven’t increased the tax on gas in nearly 25 years and, as a result, New Jersey’s gas tax is now the second-lowest in the nation and the state is running out of options to fund vital transportation needs,” Rousseau said.
Rather than increasing the current 14.5-cent per gallon gas tax which is already being used entirely to pay off debt on past TTF projects, New Jersey Policy Perspective recommends extending the 7 percent state sales tax to gasoline, which would generate the equivalent of an additional 24.5 cents per gallon at the current $3.50 per gallon average price.
With gasoline usage -- and therefore, gas tax revenues -- likely to drop in future years as cars become more fuel-efficient, the sales tax option has the advantage that it will grow incrementally as gas prices increase, Rousseau noted. Sixteen states and the District of Columbia already have similar sales taxes on gasoline, and Florida and Massachusetts impose a gas tax that automatically rises with inflation.
Even with New Jersey Policy Perspective’s proposed increase, New Jersey’s per-gallon gas tax of 39 cents per gallon would rank ninth nationally, behind California (52.9 cents), New York (49.9), Connecticut (49.3), Hawaii (49.0), Pennsylvania (41.8), Michigan (41.4), Indiana (40.8), and Illinois (39.1), and just ahead of North Carolina (37.8) and Florida (36.0).
All 10 of those states have increased their gas taxes in the past five years. Connecticut, Pennsylvania, and New York raised their gas taxes by 15.0, 8.6, and 9.5 cents a gallon, and Georgia’s 16.1-cent increase was second only to California’s 17.6-cent increase.
Even conservative Wyoming, which previously ranked below New Jersey in 49th place at 13 cents a gallon, raised its gas tax by a dime to 23.0 cents per gallon, leaving the Garden State ahead of only oil-rich Alaska, which levies a 12.4-cent gas tax on the few motorists who use its sparse arctic roadways. That’s what makes New Jersey’s failure to raise its gas tax in 25 years -- since Republican Gov. Tom Kean, creator of the Transportation Trust Fund, was in office -- so inexplicable, even considering the antitax political climate that has prevailed since the ouster of Gov. Jim Florio and the Democratic Legislature that raised state income and sales taxes by $2.8 billion in 1990. Since then, the only increase in a broad-based tax was Corzine’s restoration of the sales tax to Florio’s 7 percent from the 6 percent to which it had been reduced by Republicans.
Christie ran on a “no new taxes” platform, insisting that “New Jersey has a spending problem, not a revenue problem,” and vowing to cut income and business taxes. It is a popular position: Areleased a week ago found that two-thirds of New Jerseyans oppose a gas tax increase, even if the entire increase was devoted to road maintenance.
Nevertheless, David Redlawsk, the poll director, noted that Prieto and Lesniak have room to make their case that raising the gas tax would be preferable to increasing borrowing to pay for transportation construction projects. In fact, 60 percent of independents, 58 percent of Democrats, and 53 percent of Republicans prefer a gas tax increase to higher borrowing.
“Borrowing more money for road repairs appears to be even more distasteful than raising taxes for many New Jerseyans,” Redlawsk said in announcing the poll’s results. “The choices are not good -- pay now or pay more later -- and as a result, the usual differences across political parties are washed out. Some people think nothing should be done, but most appear to recognize there is a need to fix roads.”